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Do you think this whole issue is going to affect the short sale process at all? I am in the middle of a short sale as the buyer. I am hoping this does cause any more delays..
BoA is a train wreck right about now... but that's a whole other thread.
If anything, I would think the entire foreclosure-gate mess would entice them to close off on the short sales faster - with the main caveat being that the title insurers are on board.
With MikeyKid, I think it would give banks more incentive to take a short sale. I don't see an issue with title. The title insurance is handled between the seller and buyer and buyer's lender, not the seller's bank (other than possibly picking up the title fee for the seller).
I see this benefiting or neutral for the short sale market at least in the near term. However, if it drags on for months, it will certainly depress the real estate market.
BoA is a train wreck right about now... but that's a whole other thread.
If anything, I would think the entire foreclosure-gate mess would entice them to close off on the short sales faster - with the main caveat being that the title insurers are on board.
I agree with this (except I don't understand why you think having title insurers on board is bad thing. I don't even think it related, certainly not a detriment)
The biggest decision mortgage companies have on short sales is whether they think they can get more with the short offer or foreclosure. With the foreclosure option temporarily out of the picture, their options now are to accept the short offer or just wait to see what happens.
I agree with this (except I don't understand why you think having title insurers on board is bad thing. I don't even think it related, certainly not a detriment)
The biggest decision mortgage companies have on short sales is whether they think they can get more with the short offer or foreclosure. With the foreclosure option temporarily out of the picture, their options now are to accept the short offer or just wait to see what happens.
This will mean lower short sale offers.
I was saying that the title insurers have to do their insurance thing regardless... No transaction is going to take place without title insurance. Based on foreclosure-gate, we know the issues with insuring clean title on a REO - but there's more then meets the eye there. Not much time and probably write more on this later, but ultimately the fraud is not just going to impact REOs. The bank fraud is traceable back to the original underwriting and securitization of the mortgages themselves.
In the short term I would suspect that they'll try to push through what they can... However, at some point the title insurers could just as easily bail on short sales or even any residential transaction where RMBS, MBS, etc was involved. One thing about RE is that it is still HEAVY on the paper - in fact there's all sorts of legal requirements around paper (i.e. blue ink signatures). I'm guessing people are going to start looking very closely at MERS - the real question is if MERS will hold up to being picked apart by the lawyers.
I agree with this (except I don't understand why you think having title insurers on board is bad thing. I don't even think it related, certainly not a detriment)
The biggest decision mortgage companies have on short sales is whether they think they can get more with the short offer or foreclosure. With the foreclosure option temporarily out of the picture, their options now are to accept the short offer or just wait to see what happens.
This will mean lower short sale offers.
I see your logic. But I wonder if it will work out that way in the real world. I suspect the Negotiator in charge of the short sale is measured on recovery as a percent of assessed value. If it does not sell short, in the "old days" it would go to foreclosure, hence not effecting the Negotiator's performance. Now that it can't go to foreclosure (at least for several months at the least), The Negotiator is still measured on recovery as a percent of assessed value. The Negotiator has no incentive to let the property go for less. So what if it just sits there? If it sits long enough, they will order another appraisal - and the Negotiator has a new target to hit.
It might just work out the opposite way -- with a reduction in supply, the Negotiators may just hold out for more money. With fewer REOs on the market, maybe buyers will jump in afraid to miss the bottom.
I don't know -- just a thought. We'll all see pretty quickly.
Where do you see homes owned outright for sale? Do you think they would be more valuable to a buyer now if the title is clear?
I suspect it depends on the area. In one high end neighborhood here in Henderson NV, there have been 32 transactions in the past 12 months, and 30 of those 32 were distressed sales (short or REO). Only 2 were normal sales. Currently there are numerous shorts and REOs for sale and a few non-distressed. The non-distressed homeowners seem to have unrealistic views of the value of their properties. I put in an offer at what I believe is a fair price based on the comps which were all short or REO. The homeowner kept saying in essence "those are not comps - they were short or REO, so they don't count as comps."
I don't know what a professional appraiser might say, but in my mind the new comps are the homes that are selling - at a $/sf of the distressed properties. I am not going to pay a significant premium for a non-distressed house.
Hello everyone! I am wondering if bank of america haulting foreclosures will effect the short sale process as well. I have recently sent everything needed to the bank, so now me and they seller are just waiting. The bank is countrywide, which i know is know bank of america. I'm wondering if all of this will make it go so much slower or have any effect at all. Thank you very much for your help!
Becky
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